Missoula has just kicked off its 4th quarter and the market is still moving at a tremendous pace compared to years before. As always, here are some numbers to show you how things are going in our little college town here in Western Montana.
Missoula’s 3rd quarter was a busy one, in our valley we saw 298 residential sales occur. This is up compared to last year by 51 homes, or an increase in sales volume by 21%. To find the last time the 3rd quarter had similar numbers you’d have to go back to 2007 where we saw 403 sales over the same time span. The next year in 2008 sales dropped to 280 units and the next year during the height of the new buyer tax credits sales were at 285.
On the year through the first three quarters we’ve seen 726 homes sell in our MLS (in the Missoula valley). Compare that to last year at that point and we were at 595 sales – a 22% increase. You’ll have to go back to “pre-bubble” times again to match these numbers, in 2008 through Q3 we were at 757 sales in the same period, however at this point in 2008 the economy was falling apart rapidly.
So how will Missoula finish on the year? Well consider this, last year we saw 779 residential sales in all of last year and through the first 9 months of the year we are sitting just 53 sales short of surpassing that already! Today is October 5th, and the YTD closing total is sitting at 739. Add in that we have 145 properties in our MLS marked as either under contract, UC backup offers, or UC short sale and it’s pretty clear we’re going to see a healthy volume rebound. Over the last 3 years Missoula has averaged about 210 sales in its 4th quarter, considering we’ve been riding on a 21% or so increase in volume we could be looking at as many as 250 more sales this quarter total, add that in to our 726 through Q3 and you’re looking at 976 sales on the year. I predict we may fall a little short of that, fall sales in election years tend to be a little funky, I’d project somewhere closer to 950 or so might be a safer bet. And when was the last time we’ll have seen this many units? Well in 2009 we saw a HUGE 4th qtr aided by the tax credits not even hit that (918 sales), 2008 the year before was worse at just about 900 sales. 2007 was much higher though at 1215 sales total.
Volume is good, but drilling down we still see challenges:
- New Construction sales in the MLS is up by 87% in volume (43 units this year) but is still below what we saw in 2010 (65) and 2009 (96). New construction is still lagging, the 43 units sold is the 2nd lowest we’ve ever seen in our MLS.
- 87 REO/Foreclosures resold in our first three quarters, that’s a 26% increase from the year before (69). Foreclosures re-sales are still happening and the pace has not slowed. While other markets in the west have started to see foreclosures become less of a presence in their markets ours has not yet. However 89 sales represents just 12% of our total sales volume – so it’s still relatively low.
Finally, the election, how will this impact volume? It’s tough to say, looking at the last major election our economy was in a free-fall. Our MLS only keeps 10 running years of data so I can’t go back and look at what happened in 2000 either, but here’s what we’ve seen with the last 2 presidential elections, these numbers represent Nov & Dec volume in those years:
2007/2008/2009: 157/65/142
* It should be pointed out 2007 was pre-bubble, 2008 was fallout, 2009 was incentivized with a tax credit
2003/2004/2005: 135/160/197
* In an exponentially growing market
So it’s tough to call, I wish we had further back data of volume in the 2000 election and the 1996 election but we don’t. Additionally with time on market and sales activity it’s a challenge to say if the final 60 days of the month represent activity that occurred before the election or after it.
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